Four major international organizations have set up an integrated website with tools and other resources to help developing countries boost their tax systems and address immediate challenges, such as the coronavirus crisis.
The IMF, OECD, U.N., and the World Bank unveiled the site March 31 under the aegis of their joint Platform for Collaboration on Tax in an effort to pool their tax policy and administration expertise. The website includes toolkits, including a previously published toolkit about transfer pricing comparables for developing countries, and an online integrated platform database listing the organizations’ ongoing domestic resource mobilization projects and other activities around the world.
The platform, first announced in February 2016, is meant to facilitate and deepen cooperation between the four organizations on tax issues.
The website also contains publications and guidance, as well as a COVID-19 tax response page, linking to relevant blog posts and “knowledge resources.” These include a new OECD Forum on Tax Administration (FTA) reference document listing measures that tax administrations have adopted to help taxpayers deal with the economic fallout of the pandemic.
The FTA document, published March 31, lists measures according to type, such as those that give taxpayers more time to comply with their tax obligations, including filing and tax payment deadline extensions; and those that expedite tax refunds. Measures also include temporary audit policy changes and other steps to ensure greater tax certainty; better taxpayer services; and communication initiatives.
Moreover, the document notes design considerations that tax administrations should take into account when designing measures in response to the coronavirus crisis. The FTA advises tax administrations to think about whether to target measures to those taxpayers that have been hit the hardest by the pandemic and whether to apply measures to all taxpayers or just those in specific segments, such as large businesses and the self-employed.
Tax administrations should also evaluate how long those measures should be in place and try to understand their potential consequences for taxpayers, the document says. Deferring tax reporting deadlines could affect the timeliness of much-needed refunds for taxpayers experiencing cash flow issues, it adds.
Some measures could be more vulnerable to fraud, which tax administrations should be aware of, the FTA said. “In addition, it is possible that the frequent scam approaches that are now seen (with scammers asking for account details or attempting [identity] fraud) may also rise in the coming period as the number of different communications with taxpayers and citizens increases in an inevitably more confused environment,” the document says.
Another issue to consider is how to make these measures available to taxpayers that are digitally challenged because of such factors as age and location. “Tax administrations may wish to consider how the measures that they are taking can be best communicated to taxpayers in those situations and how they can be most easily taken up,” the FTA said, pointing to such communication channels as the telephone, fax machines, and family members.
Governments around the world are mulling approaches to support their citizens amid the coronavirus crisis, according to Hans Christian Holte, director general of the Norwegian Tax Administration and FTA chair.
“For tax administrations, this means looking at the measures they can take to continue to carry out their core functions efficiently and safely, and how they can best support taxpayers and the wider economy through this difficult period,” Holte said in a March 31 statement.
Publication of the FTA’s reference document, which will be updated regularly, comes shortly after the OECD outlined emergency tax policy and administration measures governments can adopt to respond immediately to the pandemic. The measures were posted on the OECD’s own platform focused on coronavirus policy responses across different issue areas.